Washington ? Gabe Klein, a regional vice president for Zipcar Inc. car-sharing service, is getting a lot out of his row house, including cash.

By refinancing the property twice in the past three years, Klein has been able to take nearly $300,000 in cash out of his growing equity and plow it back into renovation projects. The improvements have helped lift the house’s appraised value to $800,000 last year, or three times what Klein paid for it three years ago with just a $10,000 down payment.

Klein still has money to burn. The last time he refinanced, he took $80,000 out of the transaction to pay for renovations and was given a $100,000 line of credit. Klein said he might use the money to buy an investment property.

The value Klein’s house has generated — more than he has made from working in the past three years — is changing his view of the future.

“I’m thinking I need to buy a house a year for the next 10 years and then retire,” said Klein, 34.

Klein is like millions of Americans whose attitudes about homeownership have been transformed by the unprecedented growth in property values and the ability to tap that value today. It used to be that a mortgage was more or less forever, and rising equity was considered the untouchable foundation of a retirement nest egg.

Now home equity is viewed a bit like found money. A whole generation of homeowners is able to live in a way their parents never dreamed of back when homes appreciated a percent or two a year and cashing out equity meant robbing from your retirement.

“If you go in at the age of 25 and you’ve seen 100 percent appreciation in your property, that’s going to affect the way you look at housing for the rest of your life — even differently than your parents, who saw 1 percent appreciation per year for decades,” said Doug Duncan, chief economist for the Mortgage Bankers Assn.

“Certainly we’re in a new world today,” said David Lereah, senior vice president and chief economist of the National Association of Realtors who wrote the book, “Are You Missing the Real Estate Boom?”

Warnings of risk

But there are trade-offs. Clearly, the economy has benefited from am increasingly liquid approach to homeownership, as consumers have taken money from their homes and streamed into home centers, garden stores, furniture retailers, car dealers and even travel agents. And mortgage brokers say most people are spending their equity prudently: reinvesting in their own homes, buying second homes, paying off more expensive debts and the like.

But could consumers become addicted to this wealth, and forget the inherent risks? How will people react when the real estate market changes and there just isn’t as much money to play with?

Some clients “feel they have all this equity burning a hole in their pocket,” said Andrew Chassaing, senior financial specialist for Wachovia Bank. “They keep coming back for more, and I know they’re not renovating their house. They just spend a lot.”

Refinancing options rise

Even among the most conservative homeowners, converting equity into cash is becoming more commonplace.

Elizabeth Cruppa, an office manager with a Washington law firm, takes a conservative approach to home equity. Ten years ago she used a line of credit to put a new kitchen in the suburban home she has had for 18 years. Last month she closed on another loan she’ll use for a new furnace.

“I don’t want to touch my savings,” she said. “This way I get the interest deduction.”

Several factors make this lending and borrowing possible, especially the $4 trillion in value the nation has added to its housing stock in just the past four years. Compared with that, the $147 billion and $139 billion Americans have pulled out of their homes in the past two years don’t seem like that much.

But it’s not rising values that have prompted this surge, mortgage experts say; it’s the growing comfort with the experience.

Even the most traditional homeowners began thinking about their homes as piggy banks during the first big refinancing boom in 1992, when mortgage rates fell below 10 percent. Since then, there have been several more surges of refinancing because of falling rates.

“The mystique of what a mortgage is has kind of gone away along with the competitiveness of the market,” mortgage broker Steve Calem said. “It’s a big change.”

As consumers have become more confident about refinancing, the mortgage industry has made the process much quicker, easier and cheaper. Twenty years ago, the axiom was that it could pay to refinance if rates had dropped by 2 percentage points. Today, it can pay to refinance if you can drop your rate by half a percentage point, said Duncan of the Mortgage Bankers Assn.

And 20 years ago, there were about 10 to 15 kinds of mortgage loans, Duncan said; today there are 250 to 300. Banks have used advances in technology and consumer databases to reach new segments of the home-owning population, such as those with weaker credit, and have tailored financial instruments to meet the needs of just about any consumer at any time.

Newly available loans have increased the rate of homeownership nationwide, which helps push prices up. Those higher prices mean more equity — and more owners tempted to cash in on that equity. Roughly half of all refinancings in the past few years have included some cash-out.

Young approach

And if there’s one rule of thumb, it’s that younger and newer homeowners are much less inhibited about it.

“Your twentysomethings, your thirtysomethings, they’ve got no problems with it,” said Chassaing of Wachovia. “Because a lot of these first-time home buyers — they won the lottery.”

But economists and lenders worry about what happens when home prices stop escalating the way they have been.

“Certainly as things retreat, you’ll have some households that find themselves with two sets of loans — one on their equity line and one on their primary residence, as well as their new property investment — and that could be a lot,” said Lereah, of the Realtors association.

In a speech last fall, Federal Reserve Chairman Alan Greenspan painted a relatively sanguine picture of such cash-out transactions, saying they’d “likely improved rather than worsened the financial condition of the average homeowner.”

But it’s still unclear what the long-term effect has been on consumer behavior and ability to plan for retirement. Some economists say they see some younger homeowners seeking immediate gratification without properly considering the potential consequences.

Home-equity wealth, the economists say, remains a huge piece of the puzzle when it comes to the golden years.

“For the average family in the U.S., home-equity wealth accounts for about half of their net worth,” said Frank Nothaft, chief economist for mortgage finance giant Freddie Mac. “That’s why I do think it’s important that families do that reality check and try not to borrow to the hilt every chance they get, because they’re taking away from their own future.”

Then again, to some people, tapping home-equity cash is all about the future. In a way, the real estate boom is giving younger homeowners a new breed of retirement plan.

Nick Koufos, an attorney for the Securities and Exchange Commission, is 36 and has three children. He recently did a cash-out refinance on his suburban Washington home to build a house in Pennsylvania — to which he plans to retire someday.

“I think it’s better to get it done sooner rather than later,” he said. “I don’t see how I could lose money.”